Add Manual Refund option to WooPayments (mark order refunded without processing payment refund)

Hi WooPayments team,

Please can you add a “Manual Refund” option within WooPayments orders (similar to Klarna, Clearpay, PayPal etc), where merchants can mark an order as refunded inside WooCommerce/WooPayments without actually triggering a refund through WooPayments / Stripe.

Why this is needed:
In our business we often process refunds via store credit / gift card plugins, or via alternative resolution methods (replacement orders, partial goodwill credit etc). In these cases we still need to:

Mark the order as Refunded inside WooCommerce for bookkeeping and reconciliation

Ensure refund reporting is correct for UK VAT and accounting records

Record the refund internally, while not refunding the original WooPayments transaction

At the moment WooPayments only provides “Refund via WooPayments”, meaning we cannot properly handle workflows where the refund is processed in a different way (e.g. store credit) while still keeping WooCommerce order status and VAT reporting accurate.

This creates unnecessary admin time and causes confusion in settlement reporting.

Other payment providers (including Klarna/Clearpay) already support a manual refund option, so this feels like an important missing feature.

Thanks,
Tom